TOP NEWS
China looks to modernize steel sector with stricter rules for new capacity
China's Ministry of Industry and Information Technology introduced stricter rules for companies looking to add new steel capacity, Reuters reported. Under the new rules, companies looking to add 1 tonne of new capacity will have to close at least 1.25 tonnes of old capacity in environmentally sensitive regions, which include top steel province Hebei as well as Jiangsu. Overall, China wants to cut between 100 million and 150 million tonnes of steel capacity as part of a five-year plan that runs through 2020.
SAIL targets increased footprint in overseas markets
Steel Authority of India Ltd. is targeting an increase in exports to Japan and Korea and widened its product portfolio to export finished steel, The Hindu reported. As part of a revamped marketing policy based on distributor-centric sales, increased share of value-added and customized steel, SAIL is also exploring markets in Africa, the Philippines, Indonesia, Thailand and Vietnam.
Germany's IG Metall union to stage walkouts in push for higher pay
Thousands of workers from the metals and engineering industries in Germany are set to stage walkouts across the country from this week to push for higher pay, Reuters reported, citing the IG Metall union. The union is seeking a 6% increase in wages and a shorter working week. The companies so far have offered only a 2% increment and a one-off €200 payment in the first quarter. "Should there still be no progress then, we will add more warning strikes and decide whether to go for 24-hour strikes," said Knut Giesler, head of IG Metall in North Rhine-Westphalia.
BASE METALS
* Since the Chinese government imposed tougher restrictions on metal scrap imports, refiners and even smelters such as Jiangxi Copper Co. Ltd. are looking at alternatives including processing copper scrap in Southeast Asian countries, Reuters reported. Analysts expect this to lead to higher demand for refined copper.
* The Chilean government must capitalize Codelco consistently to maintain efficient and productive operations, Chairman Oscar Landerretche and CEO Nelson Pizarro said in a joint interview with daily La Tercera. The executives expect Codelco to start reporting better results this year, as the price of copper is expected to remain above US$3 per pound.
* Union workers ended the 26-day strike at Chilean state miner Empresa Nacional de Minera's Paipote copper smelter after reaching an agreement with the company over wage increases. The deal includes a readjustment of 1% on inflation and an end-of-year bonus of 3 million Chilean pesos per worker.
* Asiamet Resources Ltd. subsidiary PT Emas Mineral Murni was granted the key production license needed to advance its Beutong copper-gold project in Indonesia to the development stage.
* PolyMet Mining Corp. shares rose over 10% in early afternoon trading on the NYSE and Toronto Stock Exchange after the Minnesota Department of Natural Resources released its draft permit to mine for the company's NorthMet copper-nickel-precious metals project in the state. An approved permit will allow the company to construct and operate the project, which has been held up by challenges.
* The U.S. Army Corps of Engineers accepted the U.S. Clean Water Act 404 permit application Northern Dynasty Minerals Ltd. filed for the development of its Pebble copper project in Alaska.
PRECIOUS METALS
* In 10 months of operations in 2017, Torex Gold Resources Inc. poured 241,000 ounces and sold 244,800 ounces prior to the illegal blockade of its El Limon-Guajes mine in Mexico. Meanwhile, the company regained access to the mine site through a road used during construction, allowing crews to inspect the site, make maintenance plans and plan a restart of operations once the site is secure.
* With key approvals and funding in place, Equinox Gold Corp.'s board approved a total project budget of US$146 million for the full-scale construction of its Aurizona gold project in Brazil.
* Anaconda Mining Inc. announced an initial mineral resource estimate for the Argyle deposit at its Point Rousse gold project in Newfoundland and Labrador. The estimate, reported at a 0.5 g/t gold cutoff grade, included indicated resources of 38,300 ounces and inferred resources of 30,300 ounces of gold.
* Maya Gold & Silver Inc. reported a measured and indicated mineral resource at its Zgounder property in Morocco of 10 million ounces of silver. Of the total measured and indicated resource, 7.9 million ounces are pit-constrained at a cutoff grade of 61.89 g/t and 2.1 million ounces are underground at a cutoff grade of 125 g/t.
* Severe cold weather hampered outside surface crushing at Sage Gold Inc.'s wholly-owned Clavos gold mine in Ontario, and along with the delayed connection by Hydro One to connect the mine to the grid, precipitated a need for further working capital. The company plans to optimize the existing mine plan for Clavos and update its mineral resource estimate, which will become the basis for a pre-feasibility study.
* Jubilee Metals Group PLC said a tailings spill occurred Dec. 29, 2017, at a chrome and platinum recovery plant at the Hernic ferrochrome mine in South Africa, causing a V-shaped failure of the side wall of compartment two of the tailings dam. The spillage was contained on the adjacent property. The company started the cleanup process and expects to resume depositing tailings in compartment two before the end of the month.
* Rio Silver Inc. and Magellan Gold Corp. agreed to terminate a property option agreement over the Ninobamba silver-gold project in Peru.
* Orefinders Resources Inc. completed the acquisition of a package of nine gold properties in Ontario's Shining Tree district. The company renamed the consolidated land package the Knight project, with the individual property names reverting to zones within the broader project.
* An infill drill program at the Bartons deposit within Millennium Minerals Ltd.'s Nullagine gold mine in Western Australia increased underground resources at the deposit by 22%, to 627,300 tonnes at 4.9 g/t gold for 97,900 ounces of contained gold. Indicated resources, meanwhile, increased more than sixfold, to 407,400 tonnes grading 5.6 g/t gold for 72,900 ounces of contained metal from 10,100 ounces of gold.
* Vantage Goldfields Ltd. approached the Independent Development Corp. for a loan to fund recovering the bodies of the three workers who were trapped underground at the Lily gold mine in South Africa in February 2016, African News Agency reported. The company required 300 million South African rand to restart the recovery operation, and the IDC agreed to support the effort.
BULK COMMODITIES
* Mining M&A deals totaled US$96.8 billion in 2017, equivalent to a 10% increase year over year, with more than US$92 billion of the total spent on coal, iron ore and steel deals as investors remained active in the sector despite a global push for lower emissions, according to Thomson Reuters Deals Intelligence data.
* RBC Capital Markets initiated coverage on the newly minted Nutrien Ltd. with an outperform rating and a target price of US$60 per share. "We believe Nutrien is an attractive investment offering strong synergy potential, significant capital re-allocation opportunities, robust [free cash flow] generation, and an asymmetric return profile," analyst Andrew Wong said. Nutrien emerged from the merger of Agrium Inc. and Potash Corp. of Saskatchewan Inc.
* CST Group Ltd. subsidiary Sonicfield Global Ltd. entered into an agreement with China Minsheng Banking Corp. Ltd. to restructure the debt of Grande Cache Coal LP, which owns the company's suspended Grande Cache coal mines in Alberta. Sonicfield will purchase the assets from the receiver, Deloitte Restructuring Inc., and will also arrange new financing of US$71.5 million as part of the agreement. The subsidiary intends to resume mining operations at Grande Cache following deal closing, expected June 30.
* Freehill Mining Ltd.'s board kicked off a strategic review to prioritize the allocation of capital across its portfolio of assets. The review is expected to be completed within the March 2018 quarter.
* Edenville Energy Plc is in discussions for orders in excess of 10,000 tonnes of coal per month from its Rukwa coal project in Tanzania to clients in the East Africa region. The company expects monthly revenue of over US$300,000 from the contracts.
* Australia expects the price of iron ore to drop year over year in 2018 to an average of US$51.50 per tonne due to an increase in global supply and decreasing demand from China. Meanwhile, forecasts from UBS and Citi analysts expect an iron ore price in 2018 of US$64 per tonne, Reuters reported.
* Manganese prices increased after reports of output stoppages at Ningxia Tianyuan, the world's leading manganese flake producer, due to ongoing environmental inspections, Metal Bulletin reported.
* Ukraine's steel output in 2017 fell 12% year over year to 21.3 million tonnes and pig iron production declined 15% to 20 million tonnes due to the ongoing conflict in the rebel-held territories in Donetsk and Luhansk, Metal Bulletin wrote, citing national steelmakers' union Ukrmetallurgprom.
* Indian steel producers and iron ore suppliers are at odds over the pricing benchmarks to be used for the material, The Economic Times reported. Manufacturers want to focus on export parity, while miners prefer to set the tariff in relation to import costs.
SPECIALTY
* Thor Mining PLC extended the open cut life of its Molyhil tungsten-molybdenum mine in Australia's Northern Territory by 17% to seven years following an upgrade to the mine's ore reserves estimate. Open cut probable ore reserves now total 3.5 million tonnes at 0.29% tungsten trioxide and 0.12% molybdenum.
* Lucapa Diamond Co. Ltd. said it recovered a 103-carat and an 83-carat diamond from the Mining Block 8 area at its Lulo diamond project in Angola. The 103-carat stone is the 9th diamond over 100 carats recovered from the project.
* Gem Diamonds Ltd. recovered high-quality, 117-carat and 110-carat, D color, type IIa diamonds from its Letseng mine in Lesotho.
* Altura Mining Ltd. said the construction and development of its Pilgangoora lithium project in Western Australia is nearing completion and remains on track for commissioning in the first quarter, while product sales from stage-one construction are slated to begin in the second quarter.
INDUSTRY NEWS
* Hong Kong Exchanges & Clearing Ltd. CEO Charles Li said the exchange is considering amending trading rules as it struggles with low trading volumes, Bloomberg News reported. "We are talking about small scale, incremental, early-stage pilot programs, where people can at least begin to think, we could have cash incentives, we could have rebates, we could do this, that," Li was quoted as saying.
* A risk brief released by Verisk Maplecroft warned that Peru could face more mining-related social protests in 2018 triggered by the country's deregulation to relax the permitting process, Mining.com reported.
* The Indian state of Odisha decided to spend the fines collected from defaulting miners on improving social infrastructure in eight mineral-bearing districts affected by excess mining activities, The New Indian Express reported. The state government had collected 82.90 billion Indian rupees as compensation for excess mining without statutory clearances from about 72 miners by Dec. 31, 2017.
* India's central government directed states to begin auctioning 348 noncaptive mining leases by 2019 to give bidders enough time to seek necessary clearances before starting operations, Press Trust of India reported.
* RK Capital Management LLP, which runs the London-based Red Kite metals hedge fund, is in the process of restructuring, a move that may affect its activity in future years, the Financial Times reported. Meanwhile, separate filings show that co-founder David Lilley is setting up his own fund called Drakewood Capital Management.
The Daily Dose is updated as of 7 a.m. ET and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.
